Correlation Between KINGBOARD CHEMICAL and Vossloh AG
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and Vossloh AG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KINGBOARD CHEMICAL and Vossloh AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Vossloh AG, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and Vossloh AG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KINGBOARD CHEMICAL with a short position of Vossloh AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Vossloh AG.
Diversification Opportunities for KINGBOARD CHEMICAL and Vossloh AG
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between KINGBOARD and Vossloh is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Vossloh AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vossloh AG and KINGBOARD CHEMICAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KINGBOARD CHEMICAL are associated (or correlated) with Vossloh AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vossloh AG has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Vossloh AG go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Vossloh AG
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 2.86 times more return on investment than Vossloh AG. However, KINGBOARD CHEMICAL is 2.86 times more volatile than Vossloh AG. It trades about 0.05 of its potential returns per unit of risk. Vossloh AG is currently generating about 0.03 per unit of risk. If you would invest 136.00 in KINGBOARD CHEMICAL on September 14, 2024 and sell it today you would earn a total of 102.00 from holding KINGBOARD CHEMICAL or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Vossloh AG
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Vossloh AG |
KINGBOARD CHEMICAL and Vossloh AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Vossloh AG
The main advantage of trading using opposite KINGBOARD CHEMICAL and Vossloh AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, Vossloh AG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vossloh AG will offset losses from the drop in Vossloh AG's long position.| KINGBOARD CHEMICAL vs. ALIOR BANK | KINGBOARD CHEMICAL vs. DISTRICT METALS | KINGBOARD CHEMICAL vs. ADRIATIC METALS LS 013355 | KINGBOARD CHEMICAL vs. PT Bank Maybank |
| Vossloh AG vs. KINGBOARD CHEMICAL | Vossloh AG vs. Quaker Chemical | Vossloh AG vs. China BlueChemical | Vossloh AG vs. Sekisui Chemical Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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